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Dive Brief:

In response to a recent regulatory decision on solar net metering, three California investor-owned utilities have proposed an alternative to how distributed solar users are compensated for sending excess energy to the grid.

Last month, the California Public Utilities Commission issued a proposed decision that would preserve retail rate net metering for rooftop solar customers and asked sector stakeholders for comment. The utilities filed theirs this week, proposing a lower remuneration rate for solar customers that they say will help ensure they pay their share of grid upkeep costs.

Solar advocates spoke out against the utility proposal in an all-party hearing at the California Public Utilities Commission earlier this week, saying it would "gut" net metering and add complexity to the policy, Los Angeles Times reports.

Dive Insight:

Just a week before California utility regulators are due to meet over a proposed net metering ruling, tension is rising over how to compensate distributed solar users for power they send back to the grid.

Last month, the CPUC proposed to preserve retail rate net metering — with a few changes — for rooftop solar customers in California. The ruling was widely seen as an attempt to strike a balance between the demands of solar installers, who lobbied the regulatory body heavily, and utilities.

But the proposed decision failed to satisfy the power companies. San Diego Gas & Electric claimed the proposal fails to adequately address the "growing cost burden" on their ratepayers, which it claims to be about $160 million per year or $100 per monthly family bill.

The utilities proposed to charge small commerical and residential net metering customers for each kWh of electricity they use from the grid on their "otherwise applicable rate" — which determines how the customer is charged for their grid use — while ensuring a fixed export compensation rate for energy exported over a 10-year period.

The export rate — akin to a net metering rate — would be $0.15/kWh for all installations until distributed generation surpassed 7% of the utility's aggregate customer peak demand. After that, the rate would decrease to $0.13/kWh.

The IOUs are also pushing to eliminate virtual net metering, which credits customers for consuming solar energy from a single solar project that isn't where they are located. The revised structure would exist until 2019 when the net metering tariff is up for review.

The utilities' proposal reduces the amount of compensation distributed solar users would otherwise recieve under the proposed CPUC decision, which preserves net metering at the retail rate. SDG&E wrote in the utility comments under retail rate net metering it pays $0.176/kWh for power from residential net metered systems and $0.168/kWh for power from small commercial facilities.

"[A]n export compensation rate of 15 cents/kWh results in an export compensation that continues to benefit NEM customers while allowing both NEM and non-NEM customers to benefit from the ITC renewal," the utility wrote in its comments.

If the CPUC proposed decision is approved without changes, rooftop solar users will pay a one-time interconnection fee and "non-bypassable" fees of $0.02-$0.03/kWh on every kWh they use from the grid, regardless of how much they offset with their generation. Non-bypassable charges are used to fund low-income and efficiency programs in California, but historically have not been paid by net metering customers unless they use more electricity from the grid than their PV systems produce.

Utilities will have 30 days from when the proposal is approved to file plans detailing the exact amounts for the fees. The CPUC estimates that interconnection fees will range between $75 and $100 and that non-bypassable fees will amount to an additional $5 each month on solar customers' bills.

Additionally, new net metering customers would move to time-of-use rates under the proposed decision, with those interconnecting systems in 2018 required to utilize them immediately. Customers who sign up for net metering before 2018 will be allowed to wait to go on TOU rates until 2019, when all residential customers will be required to adopt them.

The CPUC is set to meet on January 28 to discuss their proposed decision.